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Verifying Chinese Suppliers


Protect Yourself from China Scams: A Comprehensive Guide to Avoiding Online Fraud

Building Trust in Trade with China

Internet fraud and online scams are very common. This phenomenon is so frequent that for every caught and shut down fraudulent operation, two new ones open. Essentially, scams revolve around the sale of branded products, computers, laptops (iPod/iPhone), cameras, and other electronic devices. Scammers use every possible method to lure you to their online store, claiming to sell branded goods, new products, offering low prices due to sales, free shipping, etc. One of the most important aspects of business is trust. No one wants to buy a product and never receive it, losing their invested money. This is a classic scam that happens everywhere in the world, including China. We will try to build a network of trust on our website to reduce such scams.

Ways to Purchase Goods from China

Generally, there are three ways to purchase goods.

  1. The first way is to hire a company in China that will help you find the goods, inspect them before shipment, and ensure their delivery,
  2. the second way is to independently purchase goods directly from Chinese companies from home, and
  3. the third way is to go to China and purchase goods with personal supervision.

In the following text, we will discuss the first two methods of purchasing.

Purchasing with Assistance

If you want to order goods from China, our advice is to definitely hire someone to assist you. This way, you get multiple benefits for a small cost. First and foremost is the security of the transaction, second, if you wish, you can request quantity and quality checks before shipment, and third, and most importantly, you might save money, as these companies can likely find goods at better prices than you can on your own!!!

What Should a Well-Written Purchase Request Letter Contain?

If you want us to help you and find the product on your behalf, you need to provide the following information:

  • as detailed a description of the product as possible, with all the features and details it should meet (the more details, the better; you can include a picture or a link where we can see the product)
  • the quantity you are interested in (the price per unit usually depends on the size of the order)
  • the target price per unit that you think would make purchasing from China worthwhile for you

Without the above details, few will start searching for the product you want.

Example of a Poorly Written Letter

Hello,
how can we buy a concrete mixer?
Regards,
Axxxxx
0xxxxxxxx

Direct Purchasing

Of course, if you want, you can directly contact a Chinese seller, pay them, and hope that everything goes well and that you receive the ordered goods.

If you decide to embark on such an adventure, don't say we didn't warn you that anything can happen. We often receive emails with questions like: we paid for the goods but never received them, or we received goods of poor quality, etc. Be very careful about scams during the third or fourth purchase from the same seller, when you have built trust in them and want to buy goods in larger quantities and for more money!

Basic Steps to Verify Any Company Would Be:

  1. Check the company's registration
  2. Verify business licenses
  3. Research the company's reputation
  4. Investigate their business history
  5. Confirm the company's physical address
  6. Request references

Our contribution to verifying companies will be marking links on our website to companies that had web presentations at the time of posting on our site. Today, you can check if they are still active and determine if it is some kind of scam.

We know that a company's website, especially if it is just a presentation on larger sites like Alibaba, is absolutely not enough. A company you want to work with simply must have its own unique website. That is why our site only includes companies with their own presentations. To start considering trade with a potential supplier, you need to thoroughly inform yourself about them. In the period since the creation of the Import from China site, we have noticed that many links to companies have disappeared, even though they were valid when we posted them! Links to companies disappear for several reasons: the company's negligence in letting their domain expire, lack of interest in maintaining the website, website changes, company bankruptcy, but most often it is companies involved in fraud. Fraudulent companies open a scam website, deceive a few visitors, and then shut it down. That is why we introduce Year-year, which indicates how long a link to a company has been on our site. This does not mean that other companies not on our site are invalid; there are simply too many companies, and we cannot list them all.

Tips

When communicating with a potential future partner:

  1. never: swear, insult on racial grounds, swear by something
  2. provide your contact details that can only help in communication and cannot withdraw money from your bank account
  3. write as correctly as possible in English, without slang or abbreviations. Do not forget that English is not the native language of the Chinese, and your interlocutor may not know English well. This way, you avoid the most common issue in trade with the Chinese - misunderstandings due to lost in translation
  4. be as clear, thorough, and precise in details as possible. The more information you exchange, the better.
  5. use the company's email instead of free ones like Yahoo, Gmail, etc., so that Chinese partners take you more seriously.

How to Recognize a Legal Company?

1) Always Send Money to the Company's Account.

Unlike many countries, China has a strict policy that every company must have its own bank account. This is the best indicator of whether a company is legal or not. Some may wonder what the difference is between a personal and a company account. Here are examples:

Beneficiary name: Zhou Jianming
Bank name: Industrial and Commercial Bank of China
Account No.: 35000********************
Swift Code: ICBKBJHLJ

or

Beneficiary name: Harbin Freedom Energy Sootblowing Co., Ltd
Bank name: Industrial and Commercial Bank of China
Account No.: 35000********************
Swift Code: ICBKBJHLJ

In the first example, you can see that the Beneficiary name is a personal name, while in the second, it is the company's name. Exporting companies should have both a regular account and a foreign currency account! Never pay anyone to a personal account in China, or do so at your own risk!

2) The Company's Website Reveals a Lot!

  • Eliminate suppliers who do not have their own website! When accessing a supplier's website, check the following:
  • Have they displayed the company's detailed address, or have they displayed it at all? Have they provided an address for city A but a phone number for city B (this happens) https://www.wayp.com/eng/china.htm - the Chinese online yellow pages directory. You can verify many companies and their details just by their phone number. Unfortunately, China does not have a unified online phone directory, at least not yet, as far as we know!
  • Avoid companies that refuse to publish their address on their website!
  • Check if the website has an "About Us" page. Be very cautious when dealing with a company that refuses to introduce itself!
  • Search online for their website URL + scam
  • A high Google ranking is a good indicator, as is the founding date of the company and the website
  • A website in both Chinese and English is much more professional and indicates seriousness in business. However, be cautious of Chinese websites that are only in English; we recommend avoiding them!

The most reliable way to verify a company is through the ministries of the People's Republic of China.

State Administration for Market Regulation (SAMR):

SAMR Official Website

This is the main page of the state administration that oversees the market, industry, and trade in China.

Ministry of Commerce of the People's Republic of China (MOFCOM):

MOFCOM Official Website

This page provides information on trade policies, industry standards, and economic data.
If you have doubts about trading with a Chinese company, contact this ministry. You will receive a response within 24 hours. They may not have answers to all your questions, but they will direct you to people or contacts who can help. You also have the opportunity to review numerous letters with questions and answers.

China Council for the Promotion of International Trade (CCPIT):

If something goes wrong in your transaction and you have unsuccessfully tried to contact your business partner to resolve the issue, then contact the following address:
CCPIT Official Website

CCPIT provides support to companies in international trade and investments.

Link for checking Chinese contract laws:
http://www.china.org.cn/

Local Administration for Industry and Commerce - Local Administration Websites:

If you are looking for information about local administrations, we recommend visiting the official websites of provinces or cities in China. For example, for Shanghai, you can visit Shanghai Municipal Government.

If you know the province where your supplier is located, you should directly contact the Local Administration for Industry and Commerce!

Here, you can verify the validity and confirm whether the company is legally registered. You can also check if they have a certificate for foreign trade. Only companies with this certificate can engage in foreign trade. If it turns out that the company you are checking is a fraudulent company, the local police will then take measures against the fraudsters.

Every Chinese province has its own Administrative Bureau for Industry and Commerce. You can find the contact websites of these Bureaus by province at the following links:

The problem is that many require a verification code that includes Chinese characters!

If you do not know in which province your business partner is located or do not have the necessary information to verify their company, feel free to ask them and request as much information as possible about their company. Your money is at stake!

Additionally, on the website of the Local Administration for Industry and Commerce, you can file a complaint if something was wrong with the transaction.

How to Verify Hong Kong Offshore Companies

You have probably come across companies from Hong Kong whose addresses are in China, mostly in the southern parts of China (Guangdong Province). These are so-called Hong Kong offshore companies. The reasons Chinese companies open these companies are:

  1. Avoiding tax payments
  2. Hong Kong has looser rules for company registration compared to China and is relatively inexpensive

The danger of trading with such companies is that they do not have a physical presence in Hong Kong, so if something goes wrong with the trade, you have no one to turn to, and you are also not protected by China since you traded with a company from Hong Kong. These companies are difficult to detect, and here are some tips:

  • You can call them and verify the phone number, but keep in mind that the number could be forwarded.
  • Visit them and verify in person (the safest option)
  • They usually have accounts in small foreign banks
  • Check the company at the following address: https://www.icris.cr.gov.hk/csci/

Further Complaints

If you have clearly been scammed or believe you have been scammed, you should report the fraud to the local police, as well as to the Internet Crime Complaint Center. This center is American, but regardless of your country, report the scam so it can be registered in the database. On this website, you can find all types of internet scams and how to recognize them.

I hope this information will help you!

To summarize, we divide companies into three categories:

  1. Verified companies - these are companies with whom the cooperation is long-term and fair
  2. Companies that partially fulfilled the agreement - these are companies that did not send all the agreed goods, companies with whom the trade was not fully completed due to some language misunderstanding.
  3. Companies to avoid - these are companies that engage in fraud or operate in a rude manner, asking you to pay extra for already paid goods, etc.
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